Executive Summary / Key Takeaways

• Nexxen International Ltd. is strategically positioned as a data-first, end-to-end advertising technology platform, leveraging its integrated DSP, SSP, and proprietary data assets to capitalize on the shift towards Connected TV (CTV) and advanced AI.
• The company's recent financial performance demonstrates solid growth, with Q2 2025 contribution ex-TAC reaching a record $87.8 million and adjusted EBITDA increasing 12% year-over-year to $29.9 million, driven by strength in data products and self-service solutions.
• Technological differentiation, particularly through its Nexxen Data Platform, exclusive ACR data partnerships (VIDAA, Vizio (VZIO)), and the newly launched nexAI suite, provides a competitive edge by simplifying platform usage, enhancing targeting, and driving operational efficiencies.
• Nexxen has reaffirmed its full-year 2025 guidance, projecting approximately $380 million in contribution ex-TAC and $125 million in adjusted EBITDA, with significant growth expected from CTV and data licensing, and further margin expansion anticipated from AI initiatives in 2026 and beyond.
• Despite macroeconomic uncertainties and intense competition, Nexxen's diversified revenue base, deepening enterprise relationships, and strategic investments in high-growth areas like mobile in-app and international CTV expansion position it for sustained long-term value creation.

The Converging Frontier of AdTech: Nexxen's End-to-End Vision

Nexxen International Ltd. (NASDAQ:NEXN) stands at the forefront of a rapidly evolving digital advertising landscape, distinguished by its comprehensive end-to-end platform and a deeply ingrained data-first philosophy. Incorporated in 2007, the company embarked on a pivotal strategic shift around 2019, recognizing the imperative for a unified solution that seamlessly connects advertisers, agencies, and digital publishers. This foresight has positioned Nexxen as a key player in the programmatic advertising ecosystem, particularly as the industry grapples with the migration of billions of dollars from linear TV to ad-supported streaming and the transformative power of artificial intelligence.

The company's strategic journey has been marked by significant milestones, including the 2023 acquisition and integration of Amobee, which substantially bolstered its enterprise display, data, and omnichannel capabilities. This integration, coupled with a rebranding to Nexxen International Ltd. in January 2024, aimed to clarify its market message and enhance brand recognition. Nexxen's overarching strategy is built on three core pillars: a unified end-to-end platform, leadership in data-driven AdTech, and an interconnected infrastructure ripe for AI innovation. This integrated approach is designed to deliver simplicity, control, efficiency, and superior outcomes for its partners, a value proposition that becomes even more critical in periods of market uncertainty.

Technological Edge: Data, AI, and Exclusive Access

Nexxen's competitive moat is significantly strengthened by its differentiated technology stack, which is central to its data-first strategy. The Nexxen Data Platform unifies all of the company's data assets and capabilities, offering a suite of advanced solutions. This includes proprietary audience discovery technology, a unified ID graph that de-duplicates identifiers for increased scale and better targeting at the person and household level, and curated media capabilities. A cornerstone of this platform is Nexxen's exclusive access to Vizio's global Automatic Content Recognition (ACR) data and its TV intelligence solution, which incorporates seven far-reaching TV data sources. This unique data access enables advertisers to onboard their first-party data, enrich it with Nexxen's extensive datasets, activate audiences on its Demand-Side Platform (DSP), and measure campaign results, often eliminating the need for multiple partners. Over 90% of Nexxen's campaigns are data-enriched, underscoring the platform's reliance on and benefit from this robust data infrastructure.

Further enhancing its technological prowess is nexAI, a comprehensive suite of generative AI and machine learning-powered assistance and features launched in Q2 2025. nexAI is vertically integrated across Nexxen's platform, designed to enhance efficiency and results across planning, activation, optimization, and monetization. It combines proprietary data, machine learning, and generative AI to deliver cutting-edge capabilities. Since its launch, nexAI has been adopted by over 100 combined users, including major agency and brand customers, with early feedback indicating significant productivity gains and improved outcomes. The first release, an AI assistant within the Nexxen DSP, provides instant insights and streamlines reporting. Nexxen plans to roll out enhanced AI-driven Supply-Side Platform (SSP) functionality and broader platform integration later in 2025 and 2026, with the ultimate goal of connecting all DSP, Data Management Platform (DMP), and SSP elements with an AI agent by late 2025 or early 2026. This will enable agencies and clients to utilize strategies across the entire advertising journey. Management anticipates these AI investments will drive operational efficiency, higher adjusted EBITDA, and margin expansion, particularly in 2026 and beyond. The simplification of platform usage through AI tools is also expected to broaden Nexxen's addressable market to smaller advertisers and partners.

Competitive Positioning in a Dynamic Market

Nexxen operates in a highly competitive ad tech landscape, vying with established players like The Trade Desk (TTD), PubMatic (PUBM), Magnite (MGNI), and Criteo (CRTO), as well as indirect competitors such as social media platforms. Nexxen's end-to-end platform, which integrates its DSP and SSP, provides a distinct competitive advantage. While many peers are now attempting to build similar full-stack solutions, Nexxen has operated with this model since 2019, giving it years of experience in serving both advertisers and publishers across the ecosystem. This integrated approach fosters greater spend consolidation, as more advertisers and agencies choose to access inventory through Nexxen's SSP, fueling both growth and margin expansion.

Compared to The Trade Desk, often lauded for its innovation speed and high growth, Nexxen offers a more comprehensive, integrated solution for both sides of the ad ecosystem. Nexxen's SSP is differentiated by its ability to bring its own demand, making it less susceptible to shifts from individual DSPs, a vulnerability that some peers like PubMatic might face. While PubMatic excels in publisher-specific yield optimization, Nexxen's holistic data integration can lead to more effective cross-channel campaign execution. Against Magnite, Nexxen's end-to-end integration aims for a more user-friendly and efficient experience, contrasting with Magnite's often more fragmented approach, though Magnite boasts a vast network scale. Nexxen's data-first strategy, particularly its exclusive ACR data and robust TV intelligence solution, provides a unique edge in audience targeting and measurement that differentiates it from competitors.

The ongoing Google (GOOGL) AdTech antitrust case presents a potential catalyst for Nexxen and other open Internet SSPs. Management believes that a more level playing field could unlock meaningful opportunities for independent, transparent, and data-driven platforms like Nexxen, leading to higher win rates and increased market share. Furthermore, Nexxen is strategically expanding its sales force in the U.S. and internationally, particularly in Europe, to capitalize on its growing global footprint and partnerships, such as the expanded relationship with VIDAA and Hisense.

Financial Performance and Liquidity

Nexxen has demonstrated robust financial performance, particularly in recent quarters, reflecting the successful execution of its strategic initiatives. In Q2 2025, the company achieved a record contribution ex-TAC of $87.8 million, representing a 6% increase year-over-year. Programmatic revenue also reached a Q2 record of $85.0 million, growing 8% compared to Q2 2024. This growth was primarily fueled by strong performance in data products, self-service solutions, tech licensing, and desktop revenue, with notable increases across health, travel, education, and automotive verticals. Conversely, the non-programmatic business lines experienced a $1.7 million year-over-year decline in contribution ex-TAC, alongside decreases in display, mobile, and PMP revenue.

Connected TV (CTV) revenue, a core growth driver, reached a Q2 record of $28.4 million, a 1% increase year-over-year. While this growth rate was impacted by macroeconomic uncertainty and tariffs, management remains confident in the long-term CTV opportunity, citing expanding partnerships and integrated capabilities. In Q1 2025, CTV revenue showed stronger momentum, growing 40% year-over-year to a record $26.4 million, accounting for 37% of programmatic revenue. The contribution ex-TAC from data products saw a significant 76% increase in Q2 2025, underscoring the growing value of Nexxen's data offerings.

Profitability has also seen substantial improvement. Adjusted EBITDA for Q2 2025 increased 12% to $29.9 million, exceeding Wall Street expectations, driven by higher contribution ex-TAC and stringent cost discipline. This resulted in an adjusted EBITDA margin of 34% of contribution ex-TAC, up from 32% in Q2 2024. In Q1 2025, adjusted EBITDA surged 95% year-over-year to $23.1 million, with the margin expanding to 31% from 17% in Q1 2024. The company's full-year 2024 results were also strong, with contribution ex-TAC retention rate increasing to 102% from 73% in 2023, and contribution ex-TAC per active customer growing 69% to approximately $526,000.

Nexxen maintains a robust liquidity position. As of June 30, 2025, the company held $131.5 million in cash and cash equivalents, with no long-term debt and an undrawn $50 million revolving credit facility. This strong balance sheet supports its capital allocation strategy, which includes ongoing share repurchase programs. From March 2022 through Q2 2025, Nexxen repurchased approximately 34.3% of its outstanding shares, investing around $229.3 million. The board is actively evaluating new buyback programs, reflecting confidence in the company's long-term prospects and a belief that its shares are undervalued compared to U.S. AdTech peers.

Outlook and Strategic Initiatives

Nexxen has reaffirmed its full-year 2025 guidance, anticipating contribution ex-TAC of approximately $380 million and adjusted EBITDA of approximately $125 million. Programmatic revenue is expected to constitute roughly 90% of the full-year revenue, with continued year-over-year growth projected for both CTV and data licensing revenue. Management's confidence in achieving these targets is predicated on stable market conditions, ongoing spend consolidation from existing customers, and the increasing adoption of its end-to-end solutions.

A key driver for future growth is the expanded strategic partnership with VIDAA, renewed in Q3 2025, which secures exclusive ad monetization rights on VIDAA Media in North America through at least the end of 2029 and extends global ACR data exclusivity. Nexxen is investing an additional $35 million in VIDAA to accelerate its North American CTV expansion, expecting this to drive greater data scale and monetizable ad inventory, with increased contribution ex-TAC anticipated from 2026. The company is also actively pursuing targeted, smaller M&A opportunities that align with its goals to expand data, enhance AI capabilities, accelerate revenue in core business lines, or enter new high-growth markets. Furthermore, Nexxen is focusing on mobile in-app monetization, with new partnerships expected to contribute to second-half growth.

The integration and scaling of nexAI are expected to be a meaningful driver of operational efficiency, higher adjusted EBITDA, and margin expansion, particularly in 2026 and beyond, with a long-term adjusted EBITDA margin target in the 40s within three to five years. The company's preliminary addition to the Russell 3000 Index in May 2025, following its streamlined U.S. listing, is expected to enhance its visibility, liquidity, and investor interest.

Risks and Challenges

Despite a compelling growth trajectory, Nexxen faces several pertinent risks. Macroeconomic uncertainty, evolving trade policies, and geopolitical tensions, including tariffs, have already impacted advertising spend from certain partners in Q2 2025. The company's guidance assumes no significant worsening of these conditions. The broader shift in consumer behavior due to AI, particularly the observed decline in web page visits and clicks per search as users increasingly rely on AI summaries, poses a challenge to traditional open internet advertising. Nexxen is actively addressing this by emphasizing growth in less-affected areas like CTV and mobile in-app advertising.

Intense competition within the ad tech industry remains a constant factor. While Nexxen's end-to-end platform and data differentiation provide advantages, it must continuously innovate to keep pace with fast-growing peers like The Trade Desk and adapt to potential changes from the Google AdTech antitrust case. Any adverse outcomes or delays in the anticipated remedies from this case could impact Nexxen's potential for market share gains.

Conclusion

Nexxen International Ltd. is executing a well-defined strategy to solidify its position as a leading data-first, end-to-end advertising technology platform. Its historical journey of strategic acquisitions and rebranding has culminated in a robust, integrated offering that is highly relevant in today's converging ad tech landscape. The company's technological leadership, particularly through its Nexxen Data Platform, exclusive ACR data partnerships, and the innovative nexAI suite, provides a strong foundation for competitive differentiation and enhanced customer outcomes.

With a strong financial performance in recent quarters, healthy liquidity, and a clear vision for future growth driven by CTV, data licensing, and AI, Nexxen is poised for continued market share gains. While macroeconomic headwinds and competitive pressures persist, the company's diversified revenue base, strategic investments, and commitment to innovation underscore a compelling long-term investment thesis. Investors should closely monitor the continued adoption of nexAI, the ramp-up of the expanded VIDAA partnership, and the company's ability to capitalize on the evolving competitive dynamics in the programmatic advertising space.